Supreme Court justices issue call to rein in judicial deference to executive agencies

Yesterday the United States Supreme Court issued its decision in Perez v. Mortgage Bankers Association, which holds that an executive agency is not required to provide public notice or consider comments when it changes a formal interpretation of its own regulations. The unanimous decision is rather uneventful, despite the fact that it limits public participation when federal agencies change official interpretations of their regulations.* Instead, the action in this decision is in three separate concurrences, by Justices Alito, Scalia, and Thomas. These justices lay out in detail why the Court should abandon its rule of judicial deference to agency interpretive rules when an appropriate case presents the opportunity.

Some background is in order. One of the largest government abuses of power derives from the administrative state, which results from the practice, over the last century, of Congress creating administrative agencies within the executive branch, and then passing laws that delegate enormous power to these agencies. These laws usually establish general guidelines within which agencies are free decide how to pursue their missions. Congress delegates most of the details to agencies through authorizations to enact regulations that clarify, interpret, fill in gaps, and frequently broaden the application of the statutes. By this method, Congress has largely ceded is constitutional power and duty to write laws to the executive branch.

Agencies combine this delegated legislative power with the customary power of the executive branch to enforce the laws. So, the agencies that write the laws (in the form of regulations) also enforce the laws. But agencies also stray into the judicial function by routinely issuing formal or informal interpretations of their own regulations. The framers of the Constitution separated the legislative, enforcement, and interpretive powers among the three branches of our federal government, with checks and balances within and between each of the three branches, to protect individual liberty. But the administrative state combines all three functions in bureaucratic agencies which write the laws, enforce them, and decide what the laws mean, with ominous consequences for liberty.

This problem is compounded by Supreme Court precedent that requires federal courts to defer to agency interpretive rules when reading agency regulations. This means that executive agencies are not only given legislative power by Congress to write regulations that authoritatively interpret statutes, but they are ceded the power by the federal courts to authoritatively interpret what their own regulations mean. This is the exact system, without separation of powers or checks and balances, that the Framers sought to prevent.

Justices Alito, Scalia, and Thomas write, in their concurrences in Perez, that judicial deference to agency interpretive rules cannot be squared with the constitutional structures of separation of powers, and checks and balances. Justice Thomas in particular provides a thorough and compelling review of the reasons why the Constitution separates state powers between the three branches, and the evils that come from undivided government power.

*The Court based this holding on its prior decisions, which limit the procedural requirements applicable to agency rule making to those specifically set forth in the Administrative Procedures Act, which exempts interpretive rules (agency statements that interpret agency regulations) from notice and comment procedures.